S.Korea crypto tax falters as yen stablecoin, China’s e-CNY advance - CoinGeek
South Korea's planned January 2027 crypto gains tax is facing a fourth postponement as opposition grows from investors, industry, and lawmakers across party lines, while the country's Shinhan Card partners with Japanese firms to test yen stablecoin payments and China upgrades its digital yuan infrastructure.
South Korea's tax on digital asset gains, originally scheduled for January 2022, has already been postponed three times to January 1, 2027. Now, a fourth delay is gaining traction amid mounting opposition from investors, the crypto industry, and lawmakers from both the ruling and opposition parties. The proposed 22% tax on annual digital asset income exceeding KRW 2.5 million ($1,888) has faced criticism due to inadequate tax-reporting infrastructure, difficulties verifying acquisition costs, and the absence of provisions for carrying forward losses.
Financial Services Commission Chairman Lee Eog-weon acknowledged the "various opinions" on the tax during a parliamentary audit on October 22, stating the government was gathering these views before making a decision. The opposition People Power Party has adopted postponement as its official position, with some lawmakers proposing to delay the tax until 2029 or 2030, while ruling Democratic Party lawmaker Park Min-gyu suggested implementation should occur two years after the first international exchange of digital asset transaction information under the OECD's Crypto-Asset Reporting Framework.
Japan-Korea stablecoin collaboration
While the tax debate continues, South Korea's largest credit card company, Shinhan Card, has signed an agreement with two subsidiaries of Japanese financial conglomerate SBI Group to test yen-backed stablecoin payments for travelers and explore blockchain settlement for trade between South Korea and Japan. The three companies entered into a Memorandum of Understanding to develop a blockchain-based global payment and settlement ecosystem.
This partnership aims to establish a blockchain-enabled payment and settlement ecosystem that bridges digital assets with traditional financial and payment infrastructures.
Shinhan Card, which serves approximately 20 million card members, has been actively pursuing Web3 and blockchain initiatives. The collaboration will examine the use of stablecoins for cross-border payments, with a focus on integrating a JPY-denominated stablecoin with in-store payment services. The firms also plan to expand cooperation to include international payment and settlement services, including cross-border trade settlement.
China's digital yuan expansion
Meanwhile, China has upgraded its digital yuan infrastructure to support a broader range of payment and financial services. The E-CNY Operation Management Center, established by the People's Bank of China (PBOC), announced enhancements to the central bank system and a framework for smart contract services. This upgrade follows the digital yuan's transition on January 1, 2026, from a "digital cash" model to a "digital deposit money" model operating within the banking system.
The upgraded system integrates issuance management, retail and wholesale payments, blockchain and smart contract services, with the aim of lowering system integration and liquidity management costs. According to a PBOC digital currency research official, the enhanced system supports applications ranging from everyday payments to trade financing and financial settlements, positioning China as a leader in the region's digital currency race.
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